Prime Minister Vladimir Putin will defend his handling of Russia's worst economic crisis in a decade on Monday and is likely to tell lawmakers there are signs the battered economy could be on the road to recovery.Russia's $1.7 trillion economy is heading into recession after a decade of rapid growth. More than a million people have lost jobs since the start of December with unemployment rates at a five-year high. [ID:nLJ964299] But officials say there are signs of hope after falling oil prices stabilised.
Putin, who as Kremlin chief from 2000 to 2008 presided over the longest boom Russians have seen for decades, is obliged to report to parliament annually under constitutional changes ordered by President Dmitry Medvedev. But he is unlikely to face a grilling in a house controlled by the ruling party he heads and analysts said he would use the speech to underline his status as a leader with influence on a par with the Kremlin chief."There will of course be no dressing-down for Putin and do not expect lots of criticism of the prime minister," said Olga Kryshtanovskaya, a sociologist and expert on the Kremlin elite. "It is more about PR (public relations) for Putin to show that he is a powerful leader who sees the light at the end of the tunnel. He wants to show the population that he is still a leader, an equal leader."
Medvedev has criticised the government several times for its slow response to the crisis, though he has stopped short of direct criticism of the man who groomed him to be president.The lower house of parliament has set aside Monday afternoon for Putin to field questions on his anti-crisis plan which supporters say marks a move from fire-fighting immediate problems to policies aimed at a wider recovery. "This will be Putin's consolidated anti-crisis plan," Andrei Vorobyov, head of the executive committee at the ruling United Russia party, told Reuters. "Anti-crisis measures have been achieved that prevented the situation from spiralling out of control, unlike in some other states. Now we need a plan that ensures social obligations are met."
Russia's leaders are worried that wage cuts and job losses could undermine the social stability which Putin prided himself on achieving while Kremlin chief. The rebound in oil prices has eased some of those concerns, at least in the short term. Russia's Urals blend of oil was trading at $49 a barrel on Friday, eight dollars higher than the $41 level factored into the revised 2009 budget.But some economists are still warning that the economy could shrink by more than 8 percent this year, nearly four times worse than the government expects.
That could make 2009 the worst year for the Russian economy since the early 1990s, with a sharper contraction than 1998, when Russia defaulted on domestic debt."I doubt we have reached the bottom of the crisis yet as the bottom will be when people start selling their belongings to feed their families," David Yakobashvili, board chairman at Wimm-Bill-Dann, Russia's top dairy producer, told Reuters."I really hope we do not reach that bottom," he said.